The following exchange between former New Jersey governors Brendan T. Byrne and Tom Kean took place in a teleconference on Friday.

Q. Now that Gov. Jon Corzine has outlined some specifics of his economic stimulus package, do you think he's on the right track?

BYRNE: He's on the right track, but there's no magic bullet. What he has proposed may not work, but he's doing what he has to do - scaling back on expenditures and recognizing limitations on appropriations, which were there but aren't now because of the economic times. But he's reacting realistically.

KEAN: What he's proposed as far as economic stimulus goes is a drop in the bucket, but at least he's trying to do something. His steps are probably insufficient. The problem is that every month that goes by, things get worse. He'll probably face a 10 percent reduction so, as hard as it is, he should be doing deeper cuts now.

BYRNE: I told him how to reorganize the public utilities commission, and nobody is interested because the utilities pick up that tab, so it doesn't impact on receipts and expenditures. But he's got to take a hard look at everything.

KEAN: When I was governor, I went through what, at that point, was the biggest recession since the Great Depression. I had to cut back on things that were very difficult to cut, but we got through it. This is worse. He's got to make deeper cuts, and right away. If he waits until December or January, the pain is going to be unbearable because the cuts will have to be too deep at that point.

BYRNE: When I was governor, Richard Nixon gave us some revenue sharing, which was a godsend. States may again look to the federal government for revenue sharing or other economic help because, as you say, it's going to be very traumatic, and the federal government is the last resort states have.

Q. Are some concessions to business and corporate interests essential to restarting our economic engine?

KEAN: Yes, but they must be done very carefully and very cautiously. Anything we can do to stimulate small business is most important because that's the majority of business in New Jersey. We need to help programs that attract tourism because that's our largest revenue. Stimulation for the arts is good because they are so important to our communities. It's very difficult. At the height of my economic troubles, we cut some taxes on business to try to create some jobs.

BYRNE: One of Gov. Corzine's recommendations involves giving small-business owners $3,000 for every new employee hired and retained for a year. I'm not sure how that's going to work, but the concept is a nice one. Certainly he has to maintain his relationship with business and the concept of being a friend to business.

KEAN: The Republicans had a good proposal, to suspend the sales tax during the holiday shopping season. Corzine shouldn't ignore it because it came from Republicans. That would help small businesses, bring business into the state and help the consumer, who would benefit from lower prices during the holiday season. That proposal shouldn't be ignored, but I'm afraid it will be because of who it came from.

BYRNE: If it is ignored, it won't be because it came from the Republicans but because we can't afford it. A long-term solution to a short-term problem is something the governor is justified in not being excited by. We need dollars now, and we can get them by cutting back. To, at the same time, be giving bonuses to business while the rest of the environment suffers cutbacks is really not a solution for today.

KEAN: That would not be a long-term solution but a short-term stimulus strictly during the holidays. And who knows, it may make money because if you suspend the sales tax, you draw shoppers from New York and Pennsylvania.

Q. How much can a governor really do in a worldwide crisis like this, and how much does he have to depend on forces beyond his control?

KEAN: I always felt that the majority of forces were beyond my control, but you get judged in comparison to the states around you. If employment is down, but not as much as the states around you, you're doing a good job. When I was governor, we hit a deficit of over $1 billion one year. A year later, I had a surplus of over a billion, thanks to a change in the national economy.

BYRNE: Oh, you're being too modest.

KEAN: No. In truth, we did better than New York, Pennsylvania, Connecticut and Delaware. Over the rest of my administration, we created three-quarters of a million new jobs, so I'm a little proud of that.

BYRNE: In our era, New Jersey has changed from an industrial economy to a service economy, and that has saved us. New Jersey and industry were not perfect together. We had to go somewhere else, and we did.

KEAN: And that's why we have to worry when the drug industry moves jobs out of the state. Business needs a lot of favorable attention from state government.

Q. How close do you think the presidential election will be in the poll that counts on Nov. 4?

BYRNE: In New Jersey, Obama will win comfortably. In the rest of the country, I would not be surprised by anything.

KEAN: In New Jersey, the Republicans haven't conducted a statewide campaign because it isn't perceived to be competitive. Nationally, we could see anything from a very strong Obama victory to a very close election. I wouldn't want to predict this one.